We are experts in dealing with assignments. These can definitely become complicated if a buyer or seller is not prudently armed with a strong understanding of what is involved beforehand. This page will provide a strong start to such an understanding, plus provide a few example scenarios (see below). However, if you are strongly considering purchasing an Assignment, this information should be treated as only a primer, as there are a plethora of other important details to be aware of. We strongly recommend you use the services of an experienced realtor and of an experienced real estate lawyer  when pursuing this type of transaction. Positively speaking though, sometimes great deals can be found!

One of the biggest challenges when selling an Assignment is market exposure, as most developers will not allow original purchasers to market them on the MLS without serious penalty. Correspondingly, when buying an Assignment, it can be hard to search inventory. Click here to view our page of Assignment inventory, which includes links to most -if not all- local Assignment-dedicated websites.  We may be reached anytime at info@realestateresults.ca if you are interested in more information, or exploring the opportunity of using our services and experience to help you purchase an Assignment.

An Assignment purchase is, in essence, the execution of a Contract to "buy" a Contract. The execution of this essentially transfers all rights and obligations of an original contract to purchase a property, prior to the completion of that property, from the party who purchased the property from the developer (the 'Assignor') to a third party (the 'Assignee'). Therefore, both a thorough review and comprehension of the terms and content of the Original Purchase Contract, and a well written and negotiated Assignment Contract to purchase the Original Purchase Contract, are required. The risks and pitfalls that can be associated with the process can be substantially avoided with a well written contract, and by using the services of an experienced realtor and legal professional.

The cost to purchase, or 'Assignment Fee', that the Assignor asks is usually loosely based on the difference between the original contract's purchase price for the property and the market value of the property if it was complete at the time of assignment. Depending on Assignor motivation, this fee can be quite negotiable. This is one of the 'pros' when considering this type of purchase, particularly if market value has increased dramatically, or if the project is close to completion and the Assignor does not want to complete the transaction. One of the 'cons' to this type of purchase, however, is the cash outlay usually necessary. Typically, an Assignor will ask for the replacement of any deposit funds tendered to the developer, plus the Assignment Fee, in one lump sum - the 'Assignment Cost', in exchange for assigning all rights and obligations to complete on the balance (original price minus paid deposits) of the original contract. There are, however, evolving contract practices and financing options that can be explored on a case-by-case basis.

We will ensure that you are prepared and have a strong, comfortable awareness of all aspects prior to any contractual purchase commitments.

Example 1:                                   

Original Purchaser buys a condo from the Developer in 2004 for $200,000 with a total down payment of 25% paid to date ($50,000); completion is scheduled for 2006.

In 2005 the original purchaser re-sells, i.e.,  "assigns" the property to another party for a sale price of $275,000.

To purchase the assignment the new buyer must pay the following in order to assume the assignment contract:

When the property is ready for occupancy in 2006 the new buyer shall complete the sale with the Vendor (Developer) under the same terms and conditions per the original purchase and sale agreement.

Example 2:                             

Mary (the "Assignor") entered into an agreement to purchase an apartment for $200,000 from the Developer (the "Vendor") as a 'Pre-Sale.' As part of the Agreement For Sale, she paid a total deposit of 25% = $50,000.

Six months later and prior to Completion of the apartment building, Mary decides to sell/transfer her contractual rights and obligations to purchase the apartment for $28,000.

Fred (the "Assignee") missed his chance to purchase an apartment when the Developer was 'pre-selling.' The building is now sold out. He wants to purchase Mary's rights and obligations for her asking price of $28,000.

Fred pays to Mary $28,000 PLUS replacement of her deposit of $50,000 which equals a total of $78,000.

When the building is Complete, Fred owes the "Vendor" (the Developer) the balance of the Agreement For Sale which is $150,000 (being the original price less the original deposit).